verizon

NORDSTROM INC., $72.64, New York symbol JWN, has formed an alliance with Toronto-Dominion Bank (Toronto symbol TD), a recommendation of The Successful Investor, our newsletter that focuses on conservative Canadian stocks. Under the deal, TD will purchase Nordstrom’s credit card loans, which total $2.2 billion. To put that in perspective, Nordstrom’s market cap (or the value of all of its outstanding shares) is $14.0 billion. Nordstrom will still get part of the revenue from these credit cards and will keep managing their related loyalty plans. The companies expect to complete the deal in the second half of 2015. Separately, TD has agreed to become the exclusive issuer of Nordstrom-branded Visa and private-label credit cards....

MENTOR GRAPHICS CORP., $26.11, symbol MENT on Nasdaq, makes technology for improving the design of electronic products and speeding up their development. For example, Mentor’s software lets automakers use less wiring in a car, identify potential safety issues and minimize electromagnetic effects on sensitive components. In the three months ended April 30, 2015, the company’s revenue rose 7.9%, to $272.1 million from $252.2 million a year earlier. Excluding one-time items, earnings per share jumped sharply, to $0.28 from $0.11, far exceeding the consensus estimate of $0.18. Sales to the auto industry were very strong, and the company continues to cut costs....

SYMANTEC CORP., $24.48, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In its fiscal 2015 fourth quarter, which ended April 3, 2015, Symantec earned $299 million, or $0.43 a share. That fell short of the consensus estimate of $0.44. The latest earnings are also down 10.2% from $333 million, or $0.48 a share, a year earlier. The decline is partly because Symantec is hiring more programmers as it expands its cybersecurity operations. However, the company’s restructuring, which includes cancelling unprofitable deals to pre-install software on new computers and simplifying its product lines, saved it $150 million in fiscal 2015....

SBA Communications Corp., $119.91, symbol SBAC on Nasdaq (Shares outstanding: 129.1 million; Market cap: $15.6 billion; www.sbasite.com), builds and operates cellular communication towers in the U.S., Puerto Rico, the U.S. Virgin Islands, Canada, Costa Rica, Panama, El Salvador, Guatemala, Nicaragua and Brazil. As of December 31, 2014, the company owned 24,292 towers (62% in the U.S.). It also manages or leases an additional 5,000. SBA gets 90% of its revenue from leasing space on its towers to wireless carriers, including AT&T, Verizon, Sprint Nextel and T-Mobile. The remaining 10% comes from site-development services, including identifying locations for new towers and installing radio gear....

ACI WORLDWIDE $21.09 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 114.9 million; Market cap: $2.4 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud. Clients include leading global retailers, plus two-thirds of the world’s 100 largest banks. ACI’s industry-leading products continue to attract prominent clients. For example, the company provides the technology behind Apple Inc.’s new mobile payment system, called Apple Pay. ACI’s revenue rose 17.5% in 2014 to $1.02 billion from $864.9 million in 2013. That was mainly due to contributions from acquisitions, including the purchase in August 2014 of Retail Decisions (ReD) for $205 million....

MITEL NETWORKS CORP., $12.24, symbol MNW on Toronto, has agreed to buy Mavenir Systems (symbol MVNR on New York) for $560 million U.S. in cash and stock. Right now, Mitel mainly offers communication services to businesses over land-line phones. Mavenir will help Mitel move into the market for voice-over long-term evolution, or VoLTE. This technology repackages voice calls as data and transmits them over wireless networks. It’s quickly becoming the standard for high-speed wireless communications. Users of Mavenir’s networking software include T-Mobile and Verizon Communications. In all, the company serves 130 telecom firms, including 15 of the world’s 20 largest mobile carriers....

MITEL NETWORKS $12.87 (Toronto symbol MNW; TSINetwork Rating: Extra Risk)(613-592-2122; www.mitel.ca; Shares outstanding: 100.1 million; Market cap: $1.3 billion; No dividends paid) develops and markets products centred on business telephone systems. This includes products that integrate land lines and mobile phones. The company also offers call centre and video conferencing products.

In the three months ended December 31, 2014, Mitel’s revenue jumped 108.1%, to $301.4 million from $144.8 million a year ago (all figures except share price and market cap in U.S. dollars). Most of the increase came from Aastra Technologies, which Mitel acquired in January 2014. Earnings per share rose 89.5%, to $0.36 from $0.19.

Mitel recently agreed to buy Mavenir Systems (symbol MVNR on New York) for $560 million U.S.

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PLEASE NOTE: Next week, Wall Street Stock Forecaster will reveal its #1 pick for 2015. Don’t miss this unique opportunity to profit. INTERNATIONAL BUSINESS MACHINES CORP., $155.87, New York symbol IBM, reported better-than-expected earnings this week. But that’s mainly due to cost cuts, as demand for the company’s mainframes and computer services has weakened. In the three months ended December 31, 2014, IBM earned $5.8 billion, down 13.0% from $6.65 billion a year earlier. Per-share earnings fell 5.7%, to $5.81 from $6.16, on fewer shares outstanding....

VERIZON COMMUNICATIONS INC. $46 (New York symbol VZ, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 4.2 billion; Market cap: $193.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.8%; TSINetwork Rating: Average; www.verizon.com) says strong price competition will likely slow its wireless division’s growth, particularly sales of cheaper mobile phones and service plans. Wireless accounts for 70% of Verizon’s revenue. However, the company is doing a good job of getting customers to upgrade from basic cellphones to more profitable smartphones. In addition, demand for its FiOS high-speed fibre optic Internet and TV services continues to improve. Verizon is a buy....

VERIZON COMMUNICATIONS INC. $46 (New York symbol VZ, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 4.2 billion; Market cap: $193.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.8%; TSINetwork Rating: Average; www.verizon.com) says strong price competition will likely slow its wireless division’s growth, particularly sales of cheaper mobile phones and service plans. Wireless accounts for 70% of Verizon’s revenue.

However, the company is doing a good job of getting customers to upgrade from basic cellphones to more profitable smartphones. In addition, demand for its FiOS high-speed fibre optic Internet and TV services continues to improve.

Verizon is a buy.

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